LIFE Begins at Retirement

What an awesome outlook that our life begins at Retirement. I mean with so much money to spend and all the time in the world this should be a dream looked forward to.

But the reality and the shocking fact about Retirement is that about 50% of people retire with very little or even no pension at all. They end up having to look into the eyes of their government or to their children.

3 Factors that result in Lack of Pensions

The first is that when a person is young their response often is that the Pension subject is for older people. “Brian, could you speak to my parents because they really need your assistance in planning for their Pension.”

So why is it that the parents of yours need help? Well because they never considered pension when they were younger and put it of until they were at the age of about 50. So eventually with little or no pension in place the 50-year-old person decides to speak to a Wealth Manager to get their pension plan in place. And now the advice that needs to be given to reach something acceptable is normally way beyond their means and they walk away despondent.

THEREFORE

Secondly younger people generally know that retirement savings is necessary BUT they do not want their money to be tied up in an investment. Now think about this for a moment. Is it not a contradiction? If you are going to end up on Pension with a decent investment that will give you a suitable required income at Pension stage surely you are going to have to commit to an investment.

Thirdly a very common factor is when people move jobs which they do quite regularly they end up removing their pension savings and spending it on items that will never generate an income. Some even buy a business but only about 20% of people make a success of growing that pension invested in their business.


Main Key to Will I have enough to Retire Successfully??

Begin early and rely on time and compound interest as seen in the below example:

Peter is 40 years old and invests $20,000 a year for retirement. Jacky is 21 years old and invests $5,000 a year for retirement. By the time each of these individuals retires, they will have invested $400,000 and $220,000 respectively. Peter would retire with about $1200000 and Jacky about $2200000 although Peter invested twice as much.  

Will I have enough to retire successfully is a question that I get asked daily.

And so let me attempt to answer this.

Firstly

You would need to know your end goal. In other words, what is the amount that you would need to earn when you are at Retirement. And of course, considering inflation.

Once this is established only then can you move on to determine what it is that you need to invest. I know this sounds extremely simple but how many of us have done this exercise and equated the end goal needed.

So now that you have determined this, what needs to be considered is the provision you have already made towards this.

For example:

A) Lump Sum from previous pension.

B) Current.Property.

C) Business with residual income.

Any existing provision can then be deducted from the end required goal.

Secondly
What is the current monthly provision you are making between your employer and yourself to reach this goal. And is it sufficient.

Now obviously it can get a little complex. However, to be able to live a comfortable life on a Pension you would generally need to contribute about 15% of your salary for a period of about 35 years at least. Of course, its not as simple as this, because as I have mentioned there are other factors that have a part to play. Further to this many people leave their pension planning until they have only 20 years or less to go. This obviously has a substantial impact on what they need to invest in the end.

Yes so, the lesson is to start early and discipline yourself so that you can live out your Golden years stress free.

Lastly some tips to make sure you will I have enough to Retire Successfully??

1) Do not rely only on your work or state Pension

2) Make a clear goal and start early

3) Contribute to a plan regularly benefiting with Dollar cost averaging

4) If you move jobs take your Pension Savings with you and do not cash in.

5) Then be committed to the end goal

6) Last but not least as this is not comprehensive and that is REVIEW your funds performance.

Will I have enough to Retire??

Let me assist you to establish the above Wealth Retirement Plan
Lets chat to get your personal Retirement Plan in place as early as you can and begin to allow compound interest to work on your behalf.